9911796707
TMI Blog2008 (8) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... extiles Inds. Ltd. are engaged in the manufacture of man-made yarn classifiable under Chapter 55 of the Central Excise Tariff Act, 1985. Their factory was visited by the officers of anti-evasion on 16-12-1994, who conducted various checks and verifications. Samples of various products including Polyester Staple fibre, Polyester Crimped based waste. Blending of polyester and viscose fibre, blended fibre and polyester crimped waste and viscose (as declared by the appellant) and blended spun yarns were drawn under a panchnama to assess as to whether the polyester waste declared by the appellant as having been used in the manufacture of yarn was actually the waste or the good quality polyester staple fibre. 3. As per the statement of Shri S.M. Vij, General Manager, in the production of 32s 45/55 P/V slub, polyester tow cut fibre white Rs. 52/- was used and polyester waste has not been mentioned in yarn mixing and nor in the fibre and that the said product manufactured by them had been cleared on payment of appropriate duty Rs.10 per kgs. prevailing at that time of P/V yarns; that this P/V yarn was not considered as PW/V yarn at the relevant time though manufactured out of tow cut whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larified that the yarn manufactured out of polyester fibre with viscose was described as P/V yarn whereas the yarn made out of polyester waste with viscose was described as PW/V yarn or sometimes as crimpless yarn; that there was price variance between the yarns manufactured out of polyester fibre or polyester waste ranging between Rs. 10/- to Rs. 25/- per kg. He also deposed that the raw material polyester waste was cheaper by Rs. 20/- - Rs. 15 as compared to polyester staple fibre. He was shown two invoices, one for the polyester fibre showing the purchase price as Rs. 79.21 per kg. and the other showing the price of polyester crimped waste as Rs. 75.50 per kg. and asked to explain the fact that the price difference between the two products was not very high, Shri Mehra explained that the payment terms to both the suppliers were different and the price difference is on account of the interest element and on account of the fluctuations in prices due to market conditions. Shri Mehra further explained that they are purchasing polyester staple fibre from M/s. Reliance Industries Ltd. (RIL) and M/s. Tere Fibre Ltd. (TFL) but the waste, which is being cleared from the said two indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e polyester waste. Accordingly, proceedings were initiated against them which culminated into the impugned order passed by Commissioner. 9. Ld. Advocate appearing for the appellants submits that the said waste was received by them from M/s. RIL and M/s. TFL to the extent of 47 - 48% and 52 - 53% of the same was received from other companies. He submits that based upon the investigations at the present appellant s end, investigations were also conducted at the end of M/s. RIL. Based upon the same, simultaneous proceedings were also initiated against M/s. RIL alleging that the polyester staple waste cleared by them was actually polyester staple fibre, thus demanding duties against them. Such proceedings traveled up to Tribunal and vide its judgment reported in 2003 (159) E.L.T. 164 (Tribunal) = 2003 (106) ECR 472 (T) the orders confirming demand of duty were set aside. As such, he submits that ratio of the above decision is applicable to the facts of the instant case, inasmuch as the Revenue s allegations are identical and the impugned order is also liable to be set aside. He also challenged the impugned order on the ground of limitation inasmuch as show cause notice was issued in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chasers. Further, she submits that the test reports clearly support the Revenue s case. As regards limitation ld. Jt. CDR submits that the Revenue s entire case originated as a result of testing of samples drawn by the Anti-Evasion officers and further investigations conducted during a long period. As such, limitation will not apply inasmuch as use of the raw material was not an issue in the earlier proceedings conducted by the Department. She also submits that the appellants were not paying any duty at all in respect of the yarn manufactured out of so called waste by taking a stand that the same was not excisable, whereas the fact is that everything manufactured has to be classified under one heading or the other. If at all the goods were not classifiable, as proposed by the Department, the same would fall under Heading 5504.29 and would be liable to discharge duty accordingly. 11. We have considered the submissions made by both the sides. As regards the appellants main plea that the present impugned order is liable to be set aside in the light of the earlier decision of the Tribunal in the case of M/s. RIL, we find that the main issue before the Tribunal in that case was as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e received in bales and not in bags. Para Nos. of OIO No. of bags as per the documents Weight of bags as per the documents (in Kgs.) No. of bags actually received Weight of bags received (in kgs.) Price of RIL to MPPL in Rs.) Price paid by the appellants (in Rs.) 9.7.2 174 6734.00 79 6734.00 35 76 to 80 9.9.1 205 8508.20 147 Bales 8516.10 34 73.50 9.10.1 183 7686.00 117 7686.00 9.10.3 210 8423.50 136 8423.50 35 81.50 9.10.5 194 7807.60 110 7807.60 35 92.75 9.11 180 8610.00 116 *1 8610.00 *1 - LR contained the reference as PSF 9.12 101 8107.00 Description is crimped wasted hand cut 35 70 9.13.1 147 7463.50 101 7436.50 35 81.50 9.14 154 6835.00 105 6850.00 40 90.75 9.15.1 148 8039.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cohesiveness; in crimped waste the crimp retention was so low that during the textile processing it would tend to flatten so it would behave like uncrimped fibre leading to weakest yarn; crimped waste is different from good fibre as per crimp as per centimeter (CPCH) and crimp take up. It is evident therefore that the crimped waste cleared from M/s. RIL could never have been used directly by the appellants and that some processing on the same such as heat setting, cutting, sorting would have to be done on the waste. As the same time, it has already been brought out that the appellant had no machinery to do the same, even though they had given the processes, they have not produced any evidence to substantiate the so called processes they had undertaken. At the same time, Shri Subhlaxmi Pandit, Lab Assistant has in his statement dt. 6-12-1994 confirmed that as per the tests carried out, the yarn blended from polyester waste viscose or polyester viscose did not show much difference; that for the yarn manufactured out of PW/V, the reading of U% did not give any abnormal reading and that whatever differences were there, they were within the tolerance limits; that they were able to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ality of fibre and had actually been manufactured out of polyester staple fibre only. 16. We also note that the test reports of Chemical Examiner furthered the Revenue s case and no arguments stand advanced by the appellant except to the extent that the test report of the samples cannot be made applicable in respect of clearances made in the past. While we agree that test reports should be made applicable only to the lot out of which samples are drawn but we find that in the instant case the Revenue s case is not solely based upon the said test reports. As discussed earlier, there is ample evidence available on record to reflect upon the clandestine modus operandi adopted by the appellant. The test report only establishes the Revenue s case that good quality staple fibre was received in the guise of waste and was the starting point of investigations. The result of investigations, in the shape of statements of various persons, which stand reproduced and discussed in detail in the impugned order, established the Revenue s case beyond doubt that the appellant used fibre instead of waste in the manufacture of yarn, which stood cleared by them without classifying under any heading of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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